Beware: Remote Work Recall Leads to Constructive Dismissal

Published in Canadian HR Reporter

Even well-intentioned employers can find themselves facing constructive dismissal claims if expectations around remote work are not properly managed.

In a new decision from the Ontario Superior Court of Justice, employers received an important reminder about the risks of altering remote work arrangements without clear agreements in place. In Byrd v. Welcome Home Children’s Residence Inc., the Court found that an employer’s attempt to force an employee back to in-person work after more than a year of remote work amounted to constructive dismissal.

Here’s what happened — and what can be learned from it.

Background

The employee had been working as a Manager at a care home since 2018 without a written employment contract. In May 2020, her husband was posted to Europe with the Canadian Forces, and she requested permission to work remotely. The employer allowed her to continue working remotely, but no formal agreement was created.

For over a year, the employee worked full-time from Europe without issue. However, the employer later hired an on-site Manager, reduced the employee’s hours to 15 hours per week, reassigned her responsibilities, and ultimately gave her an ultimatum: return to in-person work in Canada or resign. In response, the employee sued for constructive dismissal.

The Court’s Decision

The Court agreed with the employee. It found that:

Remote Work Had Become an Accepted Term: After a full year of uninterrupted remote work without complaint, remote work was deemed an accepted part of the employment agreement.

No Clear Right to Recall: The employer never clearly reserved or communicated the right to require a return to in-person work. The Court emphasized that a fundamental term like this must be explicitly stated in writing, and cannot simply be assumed.

The Employer’s Ultimatum Constituted Repudiation: Forcing the employee to either return to Canada or resign fundamentally altered the employment relationship, amounting to a constructive dismissal.

The Court did reduce the damages by factoring in mitigation income from a second job the employee had taken on during her remote work period. However, it rejected the employer’s claim that the employee’s side job, which was undisclosed, invalidated her employment.

Key Takeaways

This case reinforces several important lessons for managing remote work arrangements:

Put Remote Work Terms in Writing
If you allow remote work, formalize the arrangement. Set clear expectations about the duration, conditions, and — critically — the employer’s right to recall employees to in-person work.

Clearly Reserve the Right to Recall
Make it explicit that remote work is temporary or conditional and that the employee may be required to return to the physical workplace. Courts expect this fundamental term to be clear and unambiguous.

Don’t Assume Oral Conversations Are Enough
In a dispute, courts place little weight on conflicting memories of verbal agreements. Protect yourself with written documentation.

Exercise Caution When Issuing Ultimatums
An ultimatum like “return or resign” may be interpreted as a termination of employment unless supported by prior clear agreements. Always approach changes in working arrangements carefully and consult legal counsel first.

Review Employment Agreements
If your organization permits hybrid or remote work, review your employment agreements to ensure they include clear language regarding the employer’s right to change or end remote arrangements.

Remote work continues to be a complex and evolving issue in employment law. As Byrd v. Welcome Home Children’s Residence Inc. shows, even well-intentioned employers can find themselves facing constructive dismissal claims if expectations around remote work are not properly managed.

Need Help Reviewing or Drafting Remote Work Policies or Employment Agreements?

At Minken Employment Lawyers (Est. 1990), we help navigate the legal complexities of hybrid and remote work.

Contact us today at contact@minken.com or 905-477-7011 to ensure you are aware of your rights and obligations.

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Please note that this article is for informational purposes only and does not constitute legal advice nor should it be relied on as legal advice or opinion.